Money

  • Sep
  • 16

The Frugal Vegan: Don’t Discount Those Discounts!

Posted by at 2:27 PM | Permalink | Comments (2)


©2011 Jupiterimages Corporation

This is part of an on-going series offering tips and tidbits on how to spend less, save more, invest better, and give wisely.

With interest rates on savings at historically low levels, it may seem tough to find a way to get a decent rate of return on your money without taking on risk. Interest rates on ultra-safe Federal Deposit Insurance Commission–insured one-year certificates of deposit (CDs) are only yielding around 1 percent. Tie that same CD money up for five years, and you might get a whopping 2 percent!

Money market funds and bank savings accounts essentially pay no interest. With some banks, you now have to pay them to keep your money!

This grim reality is made even worse by two more factors. First, the Federal Reserve has indicated that it plans to keep interest rates at these low levels until at least 2013. Second, inflation continues to rise. Through the end of July 2011, the Consumer Price Index (CPI) increased at an annual rate of 3.6 percent. So, if you are earning 1 percent on a CD, at the end of the year the real purchasing power of your money went down by 2.6 percent!

What can you do? One foolproof way to get a decent rate of return on your money is to spend it wisely. For example, we all have to buy groceries—and the less you spend to get want you need and want, the more you save.

Take frozen vegetables. A brand name that I use has varieties that normally sell for $1.79 for a 16-ounce bag. These are regularly on sale for $1. That 79-cent savings is like earning a risk-free interest rate of 44 percent!

Buy-one-get-one-free sales also happen fairly often, and when they do, that’s a guaranteed 50 percent savings rate. Take that, Ben Bernanke!

Sometimes the sale may seem too insignificant. For example, an item selling for $1.09 is on sale for $1. Yes, it’s a savings of only nine cents, but that still translates into a savings rate of more than 8 percent.

But wait—there’s even more good news. The amount you save by taking advantage of sales is tax-free! Earn $100 interest on your CD, and you’ll give a portion of that back to the taxman—but with these savings, you pocket it all.

Of course, if you combine sale prices with manufacturers’ coupons and other promotions, the savings can be truly spectacular. One caveat: It’s not a good investment if you don’t need the sale items or if you buy more than you can use or store safely. The goal is savings, not hoarding!

Do you have some savings tips to share?

 

 

With interest rates on savings at historically low levels, it may seem tough to find a way to get a decent rate of return on your money without taking on risk. Interest rates on ultra-safe Federal Deposit Insurance Commission–insured one-year certificates of deposit (CDs) are only yielding around 1 percent. Tie that same CD money up for five years, and you might get a whopping 2 percent!

Money market funds and bank savings accounts essentially pay no interest. With some banks, you now have to pay them to keep your money!

This grim reality is made even worse by two more factors. First, the Federal Reserve has indicated that it plans to keep interest rates at these low levels until at least 2013. Second, inflation continues to rise. Through the end of July 2011, the Consumer Price Index (CPI) increased at an annual rate of 3.6 percent. So, if you are earning 1 percent on a CD, at the end of the year the real purchasing power of your money went down by 2.6 percent!

What can you do? One foolproof way to get a decent rate of return on your money is to spend it wisely. For example, we all have to buy groceries—and the less you spend to get want you need and want, the more you save.

Take frozen vegetables. A brand name that I use has varieties that normally sell for $1.79 for a 16-ounce bag. These are regularly on sale for $1. That 79-cent savings is like earning a risk-free interest rate of 44 percent!

Buy-one-get-one-free sales also happen fairly often, and when they do, that’s a guaranteed 50 percent savings rate. Take that, Ben Bernanke!

Sometimes the sale may seem too insignificant. For example, an item selling for $1.09 is on sale for $1. Yes, it’s a savings of only nine cents, but that still translates into a savings rate of more than 8 percent.

But wait—there’s even more good news. The amount you save by taking advantage of sales is tax-free! Earn $100 interest on your CD, and you’ll give a portion of that back to the taxman—but with these savings, you pocket it all.

Of course, if you combine sale prices with manufacturers’ coupons and other promotions, the savings can be truly spectacular. One caveat: It’s not a good investment if you don’t need the sale items or if you buy more than you can use or store safely. The goal is savings, not hoarding!

Do you have some savings tips to share?

Posted to Money | Posted to Tags: , , , ,

More:

Bookmark and Share
2 Comments

Subscribe to this post's comment RSS.

    Tammy says...

    September 17th, 2011, 1:19 pm

    I shop like this all the time! I found vegan fabric softener that I could never normally afford, on sale for 2$!!! I bought all the bottles that they had in stock! I`m set for a few years :)

    Keep your eye out for great sales and stock up!

    Susie says...

    September 18th, 2011, 4:54 am

    I subscribe to Groupon and LivingSocial.com, and take on deals that involve groceries. I got a $10 Groupon for $20 worth of groceries (bought 2 of them, so $40 worth of groceries costing $20) at a local vegetarian grocery story. I also got a similar deal for Whole Foods (also 1/2 off). When I use these, I don’t buy stuff that I normally get at a regular grocery story, like fruits, vegetables, beans, bread, and soymilk because these staples are normally a lot cheaper anyways at the regular store. Instead, I stock up on items that I’d normally get at a health food store anyway (because they’re hard to find in regular markets), like Veganaise, Vegan Cheese, vegan ice-cream, nutritional yeast, tvp, etc.

    I enjoyed this article. I too, use to think these “small” savings were insignificant, but this article puts things into perspective! Thank you.

Post a Comment

Please keep comments polite, constructive, and on topic. All fields in bold are required.

About Money

Celebrate today, plan for the future, and leave a legacy.

Recent Comments

Disclaimer

The information and views provided here are intended for informational and preliminary educational purposes only. From time to time, content may be posted on the site regarding various financial planning and human and animal health issues. Such content is never intended to be and should never be taken as a substitute for the advice of readers' own financial planners, veterinarians, or other licensed professionals. You should not use any information contained on this site to diagnose yourself or your companion animals' health or fitness. Readers in need of applicable professional advice are strongly encouraged to seek it. Except where third-party ownership or copyright is indicated or credited regarding materials contained in this blog, reproduction or redistribution of any of the content for personal, noncommercial use is enthusiastically encouraged.